[THE INVESTOR] CLIO Cosmetics has been slow in the third quarter but will recover as visitors from China return, said Shinhan Investment on Nov. 14, raising the target price to 42,000 won (US$37.49) from 37,000 won.
Its earnings were slow as revenue from duty-free sales was slashed to half due to the sharp decline in Chinese tourists, said analyst Han Gyeong-rae.
The Korea-China relationship is improving raising anticipation for clearing uncertainties and earnings improvement, forecast the analyst, estimating that its revenue next year will rise 33 percent on-year to 266.2 billion won and operating profit by 159 percent to 29.2 billion won.
Sales from across the channels will spike as it expands outlets and demand for makeup products rise, according to Han. Its operating profit ratio next year will reach 11 percent, up 5.4 percentage points, said the analyst. Its stock price has been dragged down by concerns over slow earnings but as the uncertainties have cleared, it is time to approach it more positively, he added.
By Hwang You-mee (firstname.lastname@example.org)